AICD submission on climate-related financial disclosures

On 2 October 2026, the AICD provided a submission to Treasury in response to its consultation paper on improving the efficiency of climate-related financial disclosures (Consultation).

The main proposals in the Consultation were changing the assurance rules, providing clearer guidance and reducing the burden of information requests across supply chains. The objective of the Consultation was to establish a path forward to lower compliance costs for businesses without compromising the quality of their sustainability reports.

The AICD supports the core objectives of the climate reporting regime, including improving the quality, consistency and comparability of climate-related disclosures. However, our perspective is that it is critical that Australia’s framework remains proportionate, practical and internationally aligned. In our submission, we advocated for a review of the regime’s policy settings in the context of Australia’s significant productivity and economic growth challenges, given that the regime is a significant new source of compliance costs for entities.

The key points in our submission were:

• Assurance: The AICD strongly supports extending the period of limited assurance to 2035. Given the complexity of climate reporting, ongoing capability constraints and challenges for assurance providers, our view is that a mandatory transition to reasonable assurance in 2030 would be premature. Based on current settings and timelines, Australia will be one of the first ISSB-aligned countries to move to mandatory reasonable assurance. There are no specific policy factors that warrant Australia adopting these settings in advance of other developed countries. Entities will still have the option to pursue reasonable assurance on a voluntary basis before 2035 where this is possible and considered valuable to their primary report users.

• Director liability and directors’ declaration: If the period of limited assurance is extended, the AICD considers it critical that the modified liability settings and transitional directors’ declaration are extended by the same duration. Our view is that the level of assurance that can reasonably be obtained over the sustainability report is directly relevant to the nature of the opinion that directors can reasonably be expected to express, and the degree of liability that should be imposed.

• Guidance: The AICD supports the development of additional implementation guidance, particularly on making a statement of ‘no material climate-related risks or opportunities’, and the application of proportionality mechanisms. We emphasised that guidance should be practical and tailored to the circumstances of a range of entities and industries, especially as Group 2 entities begin to report in 2026.

• Value chain requests: The AICD supports the Government increasing the availability of publicly accessible data to reduce the need for reporting entities across a range of sectors to issue complex or poorly targeted data requests to their value chain, particularly regarding scope 1 and 2 emissions.

• Application to Group 3 and not-for-profits (NFPs): We strongly recommend that the current Group 3 cohort and NFPs should be removed from the regime. The costs and compliance burdens associated with climate reporting are disproportionately significant for smaller entities, and far exceed any potential benefits to primary users. This disconnect has been recognised in New Zealand and the European Union, with both comparable jurisdictions increasing the reporting thresholds of their climate reporting regimes.